KEY POINTS:
The Government has gone some way towards making peace with the forestry sector by reversing its refusal to devolve carbon credits to the owners of "Kyoto forests" - those planted since 1990 on land not previously forested.
"We are breaking out the Bollinger," said Roger Dickie of the Kyoto Forestry Association which has been lobbying for years against what it regarded as the confiscation of the credits, likely to be worth many hundreds of millions of dollars.
Forestry Minister Jim Anderton said the Government still did not concede that the Kyoto foresters had a property right to the credits. But as the emissions trading scheme unveiled yesterday would eventually extend the costs of reducing emissions across the whole economy there was a good case for also devolving the benefits that arise from the Kyoto Protocol as well.
Kyoto foresters have to opt into the scheme, however, and whether they do so will be a business decision, since with the credits generated by the trees as they grow comes a corresponding liability when they are cut.
Some foresters might opt not to join the scheme, Forest Owners Association chief executive David Rhodes said. But then they would be eligible for afforestation grants, an alternative incentive for establishing new forests.
But Mr Rhodes was disappointed that another grievance - relating to the owners of pre-1990 forests, who will face a liability if they cut down their trees and do not replant them - had not been addressed.
They regard this as a retrospective tax and a lot of recent deforestation - dubbed the "chainsaw massacre" - has been a rush to avoid the liability, which begins at the start of next year.
It is offset by a provision that they will be allocated pro rata a share of about 20 million tonnes worth of emissions units free over the next five years, and another 34 million tonnes after that. Pre-1990 foresters who opt to replant upon harvest can opt to sell those units or to retain them in case they want to deforest in future.
The Government is aiming for a net increase of 250,000 hectares in the forested area by 2020.
That was an ambitious goal, Mr Rhodes said, although the devolution of credits for post-1990 forests would stimulate planting.
With agriculture out of the emissions trading system until 2013, and promised a generous level of grandfathering even then, the distortion between the value of land for farming and for forestry was not being addressed, he said.
Welcoming the move National's climate change spokesman Nick Smith said his party had promised to devolve some credits to foresters under an emissions trading scheme.
